General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsA record-breaking 44 container ships are stuck off the coast of California - Why Manchin Has a Point
When you hear about what is dragging the economy these days, it is not a lack of demand or available credit as was the case in 2008. The three big problems you hear are: (1) continued shipping backlogs; (2) the lack of skilled construction workers; and (3) a shortage of semiconductor chips. All three cannot be quickly remedied. Indeed, dropping billions of dollars on the problem to increase demand or construction could just make the problem worse.
The shipping backlog should eventually work itself out as either demand slows or shifts to more domestic makers. For example, there are now a lot more US makers of PPE. However, it takes time to train construction workers to replace the ones who left the profession or retired following the mortgage meltdown in 2008 when housing construction came to a halt.
Likewise, Trump started his trade with Asian countries, that with COVID precipitated the chip shortage, but it was not until Biden and Democrats started supporting subsidization of domestic chip manufacturing that the U.S. did anything to diverse its chip supply, which was heavily dependent on Asia.
So, the question is how do you approve large infrastructure/spending bill that will not in the near term make the supply issues worse? Indeed, tightening supply in the short term could just end up helping Republicans who will blame "tax and spend" Democrats when the real reason are the structural issues identified above.
https://www.businessinsider.com/shipping-delays-china-supply-chain-record-ships-stuck-california-ports-2021-8
The queue is a result of the labor shortage, COVID-19-related disruptions, and holiday-buying surges. Port of Los Angeles data indicated that the ships' average wait time had increased to 7.6 days.
"The normal number of container ships at anchor is between zero and one," Kip Louttit, the executive director of the Marine Exchange of Southern California, told Insider in July.
California ports in Los Angeles and Long Beach account for about one-third of US imports. These ports operate as a primary source of imports from China and have experienced heavy congestion throughout the pandemic.
https://www.cnn.com/2021/07/08/economy/construction-worker-shortage/index.html
New York (CNN Business)Matthew Messer hauls solar panels on the roof of a home in Long Island, New York, hoisting them one by one in the 100-degree June heat. Messer is the owner of New York Solar Maintenance, but these days he's working right alongside his lead technician seven days a week as business booms.
"This is not the perfect way to be spending my time right now," Messer says of his days spent up on roofs. "But it's what needs to happen."
That's because Messer says he can't find anyone to hire. His small business has three open roles, ranging from entry level to lead technician one example of an industry-wide problem as a labor shortage meets increased demand.
New home construction and improvement are surging, thanks to the lack of inventory in a red-hot housing market and more people working from home. In an industry already short on workers before the pandemic, construction businesses will need to hire 430,000 workers this year and 1 million more over the next two years in order to keep up, according to Associated Builders and Contractors.
Haggard Celine
(16,820 posts)Let in more immigrants! I don't think there are any more Americans who want construction jobs than already have them. Mexican immigrants do good work in construction; give green cards to undocumented people and let them work. Maybe some Afghan refugees would work those jobs. There is plenty of work for everyone, it seems.
TomCADem
(17,378 posts)Employees are not fungible. As explained in his NPR podcast, the acute shortage is in skilled and trained construction workers. While loosening immigration may help in a couple of years, it is going to take time to train such folks. So, your solution is great over the next couple of years to loosen immigration, particularly if you provide subsidies for education and training, but you can't just take someone who is unskilled and expect them to immediately be able to install solar panels, for example.
https://www.npr.org/2021/07/30/1022827659/three-reasons-for-the-housing-shortage
Haggard Celine
(16,820 posts)I thought they were talking about regular construction work, though. I've seen Mexican construction workers since Hurricane Zeta came through last year, and they do a great job and work fast. I'm sure many of them could be trained to do more technical work if trained properly. It would take time, of course, we couldn't just let them in, put them in training, and have them working in 90 days. But they seem to learn pretty quickly, especially if they're given an incentive, like a big raise.
cadoman
(792 posts)I see it in a lot of circles but it's especially disappointing to see it here. I don't think anyone appreciates having their career path pre-supposed based on their race.
The core reason we don't have more Americans involved in construction is that to take that career path they have to completely disconnect from how the educational system is steering them (which is to STEM or humanities work, post 4-year University).
There are rich opportunities for our new immigrants but we also desperately need to diversify our educational pipelines and direct funding for training.
Haggard Celine
(16,820 posts)I was talking about hiring people for jobs in which they already have some expertise. There are successful construction companies owned by Mexicans or Mexican-Americans around here.
There is nothing wrong with construction work. It's good, honest work and a person can make a good living from it. And if you're an immigrant and you want to be a nuclear physicist or whatever, you can get a job in construction or something else and put yourself through school.
Stop making it sound like construction work is something low and unseemly that only desperate people should have to do. Plenty of people who aren't immigrants make a good living doing it, too.
Atticus
(15,124 posts)a very jaundiced eye.
Elessar Zappa
(13,650 posts)it is true that we have a skilled worker shortage, particularly in construction.
TomCADem
(17,378 posts)My goodness, this is like anti-vaxxers who ignore the impacts of COVID. There are literally rows of ships out on the coast near Long Beach waiting to get unloaded. Here is the LA Times reporting on this basic fact:
https://ca-times.brightspotcdn.com/dims4/default/566ea35/2147483647/strip/true/crop/2000x1125+0+0/resize/1440x810!/quality/90/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2Fe0%2F79%2F8485d08f64505781933a69dfe56d%2Fla-fi-port-container-ships-pg-023
https://www.latimes.com/la-fi-port-container-ships-pg-photogallery.html
Again, if anyone think it is a hoax, just head out to Long Beach or Huntington Beach and look out. Those are not crisis actors holding up cardboard cutouts of ships.
Atticus
(15,124 posts)adversely impact our party is where I get sceptical. They do have an agenda.
Fiendish Thingy
(15,369 posts)I havent seen any evidence to prove those assertions, and with millions of job openings unfilled because they pay too little to live on, I think it is indeed a good idea to drop billions on an infrastructure bill that will allow millions to get free training in construction to improve their skills and fill the high paying jobs that will come from the bills.
TomCADem
(17,378 posts)That is one the reasons why he has been hesitant about the $3.5 trillion price tag? I think he has even written op-eds that specifically draw this connection.
https://www.cnn.com/2021/08/06/business/inflation-fed-manchin/index.html
Fiendish Thingy
(15,369 posts)Both Powell and Krugman see current inflation trends as transitory, with no reason for panic. The Fed has projected a tapering of bond buying and rate hikes beginning next year, which should dampen, if not extinguish inflation. (I would post Krugmans NYT columns on this topic, but they are behind a paywall).
Manchin sees inflation as a convenient excuse to block Bidens agenda, even though one has no influence on the other (because the reconciliation bill is expected to be largely paid for by tax hikes on the rich and corporations). Manchin is just using Reagan era talking points to protect his rich donors.
Good rule of thumb:
Ignore everything Manchin says, watch only what he actually does on the floor of the senate, which so far is absolutely nothing.
Soon enough, Schumer will bring the reconciliation bill to the floor for debate and amendments; Manchin is trying to get ahead of the curve with his own narrative in hope of avoiding being nailed down on what specifics he would cut from the bill.
TomCADem
(17,378 posts)Krugman's in this article seems to support the premise of my OP of supply constraints. Also, I do not see how what Manchin is saying about inflation is really inconsistent with Krugman's thesis regarding the short term causes of inflation.
In other words, if as you say inflation is transitory as Krugman notes, then should we really be increasing demand in the short term? Rather, shouldn't the spending bill be structured to avoid adding to transitory inflationary woes?
I guess I do not see the conflict that you are pointing out, since I think my OP is entirely consistent with what Krugman notes regarding shipping and supply issues:
https://www.nytimes.com/2021/08/13/opinion/us-transitory-core-inflation.html
Ive been trying to estimate how much shipping costs may have contributed to recent inflation, multiplying the reported change in the cost of shipping containers to the United States by the number of TEUs 20-foot equivalent units unloaded at U.S. ports. Theres quite a lot of uncertainty in these estimates, but as a rough guess, shipping may have added between one-quarter and one-half of 1 percent to inflation over the past year. This, too, should be excluded from the Platonic ideal of core.
Why does all this matter? As best I can tell, a fair number of people are still looking at the standard measure of core inflation which has risen almost as much as headline inflation and concluded that we really do have a fundamental problem. They could be right, and Team Transitory economists who believe that this is a transitory blip, a group that includes the Biden Council of Economic Advisers could be wrong. But you cant settle that argument by looking at a number that, however well it worked in the past, is now a clearly inadequate measure of the underlying concept of inertial inflation.
Fiendish Thingy
(15,369 posts)Since the $3.5trillion is spread out over TEN YEARS, I dont see the problem. I havent seen Krugman make this argument against the reconciliation bill specifically. Spending trillions on endless war didnt cause runaway inflation, so spending that improves the lives of everyday Americans, not just oil companies and military contractors, wont either.
The supply chain/container ship issues appear to be temporary and more linked to COVID than government spending.
Again, Manchin doesnt know what he is talking about, his comments are regurgitations from the same folks who gave us trickle down economics, designed to sabotage the reconciliation bill, not to protect the US economy.
TomCADem
(17,378 posts)You asked earlier where is the evidence of semiconductor shortages and shipping issues?
I have a car that is about 13 years old and is approaching 200,000 miles. It has been good to me, but it is now time to replace it. I can't because there are so few cars that you cannot buy one without paying significantly over MSRP. See for yourself:
https://www.autotrader.com/
The reason why GM is shutting down plants is because it has rows of completed cars that still are missing critical parts like microchips:
https://abc7chicago.com/car-chip-shortage-2021-prices-auto-gm-closes-factories/11005980/
That hope has now dimmed. A surge in COVID-19 cases from the delta variant in several Asian countries that are the main producers of auto-grade chips is worsening the supply shortage. It is further delaying a return to normal auto production and keeping the supply of vehicles artificially low.
And that means, analysts say, that record-high consumer prices for vehicles - new and used, as well as rental cars - will extend into next year and might not fall back toward earth until 2023.
The global parts shortage involves not just computer chips. Automakers are starting to see shortages of wiring harnesses, plastics and glass, too. And beyond autos, vital components for goods ranging from farm equipment and industrial machinery to sportswear and kitchen accessories are also bottled up at ports around the world as demand outpaces supply in the face of a resurgent virus.
Fiendish Thingy
(15,369 posts)I dont doubt the reality of chip shortages and shortages of other things. What I was calling into question, and have seen no evidence of is:
1) will the spending in the reconciliation bill make these shortages significantly worse? And
2) if the above is true, is that justification for not passing the $3.5 trillion infrastructure bill?
The obvious answer to both, IMO, is no. This is just more malarkey thrown out to see if it sticks and successfully sabotages Bidens agenda.
The worst potential outcome I can see is the rollout of some of the infrastructure projects is delayed by shortages, and the GOP uses that to claim the bill is a failure. Im not too worried because the other benefits- child tax credits, child care, community college, etc. Shouldnt be affected by shortages.
And, if there are shortages worsened by the bill, that will also have a hidden benefit as US manufacturing of chips and other scarce items ramps up.
myccrider
(484 posts)Im no economist, and neither is Manchin, but even if they pass the $3.5T bill this fall, the vast majority of the initial fraction of that 10 years worth of spending wont even really get started until mid 2022. I dont know how much of that money is earmarked for physical infrastructure, but they cant roll out those projects until there are plans, bids on contracts, regulatory hoops, etc, etc, etc.
Many, if not most, of those projects are a year or more from breaking ground. If Krugman is correct that the inflationary spike is a temporary product of Covid, the pandemic will be over or we will have adjusted to living and working with mitigations for the disease
vaccines, masks, distancing, etc.
Plus your points, too.
Demsrule86
(68,352 posts)or Manchin.
rockfordfile
(8,682 posts)TomCADem
(17,378 posts)...which is what Biden has proposed. Some conservatives have opposed this saying let the free market decide, but the current shortage and inflation illustrates the limits of this approach. Also, strategically do you want the United States to be entirely dependent on foreign supplies of critical resources like PPE or semiconductors?
Still, in the short term, it will take years to ramp up domestic chip production.
ruet
(10,035 posts)gratuitous
(82,849 posts)Alla-Kazam! There. Did I conjure up a million experienced construction workers? No? Lemme try again: Alla-Kazam! Did it work that time? Dang. Well, at least Joe Manchin is right, because that's all that matters or needs to matter.
Alla-Kazam! Still no?
TomCADem
(17,378 posts)...is not all that helpful. At the end of the day, you need skilled construction workers to build a lot of infrastructure. This is why we can't just throw money at infrastructure. At least some of the bill needs to be directed at job training and education programs so that we have construction workers to build the projects.
If you just greenlight a whole bunch of projects at the same time, it will just cause competition for the same limited pool of skilled workers as noted in the NPR podcast linked above.
Fiendish Thingy
(15,369 posts)When I lived in California, I used to refer my students to CC programs in framing, welding, cabinetry, electrical, and many other skills and trades.
Demsrule86
(68,352 posts)TomCADem
(17,378 posts)...and I do not know any who are sitting on their hands. They are pretty booked out for months. Also, contrary to what Republicans say, workers are not fungible. They need to be trained. As the person in other post states, any bill should have education benefits, but education is not instantaneous as noted in the OP.
Demsrule86
(68,352 posts)I am sure there is training money in that bill. We absolutely must pass the bill and the GOP is never right.
FakeNoose
(32,351 posts)Create good jobs with decent salary, job security and benefits, and people will apply for them. Even college graduates would apply, since some/many can't find work in their chosen fields. I don't see this as a problem, do you?
The only problem I see is that the employers don't want to pay decent living wages, they don't want to offer job security or benefits, and our young, educated Americans won't be fooled.
Fiendish Thingy
(15,369 posts)Bidders for govt. contracts would be required to pay prevailing wages of $40-50/hr, rather than submitting low ball bids underpaying workers and pocketing the difference.
FakeNoose
(32,351 posts)We're all on the same wave length
Celerity
(42,666 posts)infrastructure bi-partisan bill, and is going after the same types of targets in the $3.5 trillion reconciliation bill.
The total new infrastructure spending in the bi-partisan bill is now only $550 billion (the other $650 billion is just renewal of old already-passed spending programmes under Trump and Moscow McTurtle).
The Infrastructure Plan: Whats In and Whats Out (it's brutal)
Biden's original plan:
What was left after they took a 2 trillion USD hatchet to it
They already chopped almost EIGHTY percent of actual new spending out of the hard infrastructure bill
and now Manchin wants to chop another almost 60 to 70% out of the even bigger bill, one that needs ZERO Rethugs votes to pass
The total new spending on Biden's original 2 bill proposals (hard and human) was $6.1 trillion.
IF Manchin and Sinema stick to their guns and chop out $2 trillion to $2.5 trillion of of the reconciliation bill, then you are looking at a total new spend for both bills of only $1.55 trillion to $2.05 trillion instead of $6.1 trillion.
That is a truly massive 2/3rds to 3/4ers total reduction in new spending, and the vast majority will be from the parts the largest single Democratic caucus in the House (the 96 person-strong Progressive Caucus) all desperately wanted, especially things to address climate change and to help working class Americans. Pete DeFazio, the Chair of the House Transportation Committee has been very, very unhappy for ages about what the bi-partisan Senators did.
I can see many of the 96 members of the Progressive Caucus (far beyond just The Squad) going bonkers if Manchin and Sinema (as the major Dem players in the 2 guttings) succeed in stripping out 4 to 4.5 trillion USD between the 2 bills. It may put both bills at risk, and then all hell will break loose between the 2 sides (96 House progs versus Manchin and Sinema in the Senate, plus the 10 renegade conservadem Problems Solver types in the House).
There is a way, IF Pelosi can pare down the dissenting progs to say 10, 20, maybe even 30 and THEN enough frontline 'psuedo-moderate' Rethugs vote for the bi-partisan bill only, in order to pass it. There is a problem (of course there is, lol) with that as well, as the House Rethugs (plus the fuckstick Trump) are going full bore to try and threaten any and all House Rethugs who may vote for the bi-partisan bill:
GOP pressure to block bipartisan infrastructure bill builds in the House
https://edition.cnn.com/2021/09/07/politics/bipartisan-infrastructure-bill-republican-support/index.html
Speaker Pelosi is DEFFO trying to make 10,000 angels dance on the head of a pin. She is probably the only person on the planet (zero hyperbole) who can get both bills passed in the House.
TomCADem
(17,378 posts)You are once again focusing on the top line number. My point is that even if you drop a money bomb on infrastructure, don't you need skilled workers to build the infrastructure. Don't you need lumber to and supplies to build infrastructure? What if the supplies you need are stuck on one of the cargo ships? What does the bill say with respect to when the infrastructure needs to be built? Your post does not mention this.
The situation now is very different then 2009. Back then, there a was a lack of credit and demand, because the mortgage crisis caused construction to halt. So then, it made sense to plow money into infrastructure to put unemployed construction workers to work. Also, there were no supply shortages such as the current shortage in lumber:
https://www.nbcnews.com/business/economy/how-lumber-industry-misread-covid-ended-global-shortage-sky-high-n1272542
A pandemic surge in home buying and renovation sent lumber prices soaring. They may never return to normal, experts say.
As home building and renovation soared amid pandemic lockdowns, the price of lumber rocketed from around $400 per thousand board feet in February 2020 to an all-time high of over $1,600 in early May. Prices have since fallen to the $800 range still nearly double their pre-pandemic rates in what could potentially be the new level for the near term.
In April, as lumber prices hovered around $1,200, the National Association of Homebuilders estimated that the rise in lumber prices had added over $36,000 to the cost of a new single-family home.
The lumber and home construction industries' misread of the economic impact, as well as Covid-related restrictions on production, and a ten-year period of under-building of new homes since the 2008 financial crisis, set the stage for undersupply as demand surged, experts say.
As one poster noted in reference to Krugman, there are lot of transitory supply side issues that are due to the pandemic, which will need to be addressed that were not present in 2008.
Yet, your post just focused on the topline number, without explaining how the bill would address the issues noted in the OP. If you just dump money into an infrastructure bill without addressing these issues, then the amount of money could just make the supply constraints worse with more buyers chasing the same supplies due to backed up cargo ships in the ports.
Celerity
(42,666 posts)that Manchin helped to strip out of the first bill, and now is singling out that he is going after in the 3.5 trillion dollar one. Some of those being the very ones that you and others are already counting into things as if they are already passed.
mackdaddy
(1,520 posts)That never seems to come up.
Back before Reagan Republicans decimated unions, workers in these jobs could buy a new car every few years, have a home and a little cabin or vacation property, healthcare, and all on only one income.
Many of these jobs require technical skills at least on the order of a 2 year degree. I taught in one of these programs for a few years. Many had "easy to get" school loans larger than my first home mortgage.
Somehow the old idea of a price/demand curve no longer works. High demand for labor for many of these jobs, but somehow we ain't paying?
northoftheborder
(7,566 posts)Maybe that's where it is - waiting to be unloaded from a ship
Silent3
(15,018 posts)First they had to wait a long time just to get a freaking special rubber glove to handle the high-voltage components in the car, and once they got the glove, then and only then did the determine that a high-voltage relay needs to be replaced, which is apparently also difficult to come by.
MoonlitKnight
(1,584 posts)The bipartisan one does not.
Its not just a bunch of construction spending. It provides for the kind of infrastructure that is needed to move forward. Like child care that allows people to work. Training. Broadband.
We have a lot of stuff to fix. The issues you cite are the symptoms of decades of neglect of both physical and human infrastructure. Kicking the can down the road is not the solution.
Deep State Witch
(10,350 posts)A lot of the construction industry is Latinx, and a lot are undocumented. TFG kicked a lot of them out of the country. Now we have a construction labor shortage. Funny, that.
TomCADem
(17,378 posts)...can be attributed to immigration providing labor during the 1990s. However, this also caused some on the left, like Bernie Sanders to support limiting immigration.
I think we should open up immigration more for both humanitarian and economic reasons. Without younger immigrants, how will we fund programs like social security as the domestic population grows older?
fescuerescue
(4,448 posts)They are fully mobile. They just have a 7 day queue to unload.
Fortunately the ships are fully loaded with food and water since their trips are usually much longer than 7 days.